Find out what are the factors influencing consumer behavior, how they work and how to better understand them in order to better meet consumers’ expectations and improve your marketing strategy.
The factors influencing consumer behavior
This article is the third in a series of articles about the factors and variables that influence the behavior of consumers.
How reacts a consumer? What are the motivations and aspirations that guide him? What are the factors that influence him? Why he will choose a product or brand over another?
Today, let’s focus on the factors influencing consumer behavior: what are they? How do they work? What is their level of importance to the consumer and how he reacts to it?
There are 4 main types of factors influencing consumer behavior: cultural factors, social factors, personal factors and psychological factors.
I. Cultural factors
Cultural factors are coming from the different components related to culture or cultural environment from which the consumer belongs.
Culture and societal environment:
Culture is crucial when it comes to understanding the needs and behaviors of an individual.
Throughout his existence, an individual will be influenced by his family, his friends, his cultural environment or society that will “teach” him values, preferences as well as common behaviors to their own culture.
For a brand, it is important to understand and take into account the cultural factors inherent to each market or to each situation in order to adapt its product and its marketing strategy. As these will play a role in the perception, habits, behavior or expectations of consumers.
For example, in the West, it is common to invite colleagues or friends at home for a drink or dinner. In Japan, on the contrary, invite someone home does not usually fit into the local customs. It is preferable to do that this kind of outing with friends or colleagues in restaurant.
A significant specificity to take into account for the brands in markets such as savory snacking or sodas and alcoholic beverages. Usage and consumption moments are not the same in all regions of the world.
While if a Japanese offer you a gift, the courtesy is to offer him an equivalent gift in return.
McDonald’s is a brilliant example of adaptation to the specificities of each culture and each market. Well aware of the importance to have an offer with specific products to meet the needs and tastes of consumers from different cultures, the fast-food giant has for example: a McBaguette in France (with french baguette and Dijon mustard), a Chicken Maharaja Mac and a Masala Grill Chicken in India (with Indian spices) as well as a Mega Teriyaki Burger (with teriyaki sauce) or Gurakoro (with macaroni gratin and croquettes) in Japan.
While all the ingredients used by McDonald’s in arabic and muslim countries are certified halal. The fast food chain not offering, of course, any product with bacon or pork.
A society is composed of several sub-cultures in which people can identify. Subcultures are groups of people who share the same values based on a common experience or a similar lifestyle in general.
Subcultures are the nationalities, religions, ethnic groups, age groups, gender of the individual, etc..
The subcultures are often considered by the brands for the segmentation of a market in order to adapt a product or a communication strategy to the values or the specific needs of this segment.
For example in recent years, the segment of “ethnic” cosmetics has greatly expanded. These are products more suited to non-Caucasian populations and to types of skin pigmentation for african, arab or indian populations for example.
It’s a real brand positioning with a well-defined target in a sector that only offered makeup products to a caucasian target until now (with the exception of niche brands) and was then receiving critics from consumers of different origin.
Brands often communicate in different ways, sometimes even create specific products (sometimes without significant intrinsic difference) for the same type of product in order to specifically target an age group, a gender or a specific sub-culture.
Consumers are usually more receptive to products and marketing strategies that specifically target them.
Social classes are defined as groups more or less homogenous and ranked against each other according to a form of social hierarchy. Even if it’s very large groups, we usually find similar values, lifestyles, interests and behaviors in individuals belonging to the same social class.
We often assume three general categories among social classes : lower class, middle class and upper class.
People from different social classes tend to have different desires and consumption patterns. Disparities resulting from the difference in their purchasing power, but not only. According to some researchers, behavior and buying habits would also be a way of identification and belonging to its social class.
Beyond a common foundation to the whole population and taking into account that many counterexample naturally exist, they usually do not always buy the same products, do not choose the same kind of vacation, do not always watch the same TV shows, do not always read the same magazines, do not have the same hobbies and do not always go in the same types of retailers and stores.
For example, consumers from the middle class and upper class generally consume more balanced and healthy food products than those from the lower class.
They don’t go in the same stores either. If some retailers are, of course, patronized by everyone, some are more specifically targeted to upper classes such as The Fresh Market, Whole Foods Market, Barneys New York or Nordstrom. While others, such as discount supermarkets, attract more consumers from the lower class.
Some studies have also suggested that the social perception of a brand or a retailer is playing a role in the behavior and purchasing decisions of consumers.
In addition, the consumer buying behavior may also change according to social class. A consumer from the lower class will be more focused on price. While a shopper from the upper class will be more attracted to elements such as quality, innovation, features, or even the “social benefit” that he can obtain from the product.
Cultural trends or “Bandwagon effect” are defined as trends widely followed by people and which are amplified by their mere popularity and by conformity or compliance with social pressure. The more people follow a trend, the more others will want to follow it.
They affect behavior and shopping habits of consumers and may be related to the release of new products or become a source of innovation for brands.
By social pressure, desire to conformity or belonging to a group, desire to “follow fashion trends” or simply due to the high visibility provided by media, consumers will be influenced, consciously or unconsciously, by these trends.
For example, Facebook has become a cultural trend. The social network has widely grew to the point of becoming a must have, especially among young people.
It is the same with the growth of the tablet market. Tablets such as iPad or Galaxy Tab have become a global cultural trend leading many consumers to buy one. Even if they had never specially felt the need before.
For a brand, create a new cultural trend from scratch is not easy. Apple did it with the tablets with its iPad. But this is an exception. However, brands must remain attentive to the new trends and “bandwagon effects”. Whether to accompany it (create a page on Facebook) or to take part in the newly created market (create its own tablet).
II. Social factors
Social factors are among the factors influencing consumer behavior significantly. They fall into three categories: reference groups, family and social roles and status.
Reference groups and membership groups :
The membership groups of an individual are social groups to which he belongs and which will influence him. The membership groups are usually related to its social origin, age, place of residence, work, hobbies, leisure, etc..
The influence level may vary depending on individuals and groups. But is generally observed common consumption trends among the members of a same group.
The understanding of the specific features (mindset, values, lifestyle, etc..) of each group allows brands to better target their advertising message.
More generally, reference groups are defined as those that provide to the individual some points of comparison more or less direct about his behavior, lifestyle, desires or consumer habits. They influence the image that the individual has of himself as well as his behavior. Whether it is a membership group or a non-membership group.
Because the individual can also be influenced by a group to which he doesn’t belong yet but wishes to be part of. This is called an aspirational group. This group will have a direct influence on the consumer who, wishing to belong to this group and look like its members, will try to buy the same products.
For example, even if he doesn’t need it yet, a surfing beginner may want to buy “advanced” brands or products used by experienced surfers (aspirational group) in order to get closer to this group. While a teen may want the shoe model or smartphone used by the group of “popular guys” from his high school (aspirational group) in order to be accepted by this group.
Some brands have understood this very well and communicate, implicitly or not, on the “social benefit” provided by their products.
Within a reference group that influence the consumer buying behavior, several roles have been identified:
- The initiator: the person who suggests buying a product or service
- The influencer: the person whose point of view or advice will influence the buying decision. It may be a person outside the group (singer, athlete, actor, etc..) but on which group members rely on.
- The decision-maker: the person who will choose which product to buy. In general, it’s the consumer but in some cases it may be another person. For example, the “leader” of a soccer supporters’ group (membership group) that will define, for the whole group, which supporter’s scarf buy and bear during the next game.
- The buyer: the person who will buy the product. Generally, this will be the final consumer.
Many brands look to target opinion leaders (initiator or influencer) to spread the use and purchase of their product in a social group. Either through an internal person of the group when it comes to a small social group. Or through a sponsorship or a partnership with a reference leader (celebrity, actor, musician, athlete, etc..) for larger groups.
The family is maybe the most influencing factor for an individual. It forms an environment of socialization in which an individual will evolve, shape his personality, acquire values. But also develop attitudes and opinions on various subjects such as politics, society, social relations or himself and his desires.
But also on his consumer habits, his perception of brands and the products he buys.
We all kept, for many of us and for some products and brands, the same buying habits and consumption patterns that the ones we had known in our family.
Perceptions and family habits generally have a strong influence on the consumer buying behavior. People will tend to keep the same as those acquired with their families.
For example, if you have never drunk Coke during your childhood and your parents have described it as a product “full of sugar and not good for health”. There is far less chance that you are going to buy it when you will grow up that someone who drinks Coke since childhood.
For brands – especially for Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) – successfully “integrate” the family is both a real challenge and an opportunity to develop a strong consumer loyalty among all the family members.
That’s why it’s important for brands to be seen as a family brand in order to become a consumer habit for parents and children when they will become adults.
Social roles and status:
The position of an individual within his family, his work, his country club, his group of friends, etc.. – All this can be defined in terms of role and social status.
A social role is a set of attitudes and activities that an individual is supposed to have and do according to his profession and his position at work, his position in the family, his gender, etc.. – and expectations of the people around him.
Social status meanwhile reflects the rank and the importance of this role in society or in social groups. Some are more valued than others.
The social role and status profoundly influences the consumer behavior and his purchasing decisions. Especially for all the “visible” products from other people.
For example, a consumer may buy a Ferrari or a Porsche for the quality of the car but also for the external signs of social success that this kind of cars represents. Moreover, it is likely that a CEO driving a small car like a Ford Fiesta or a Volkswagen Golf would be taken less seriously by its customers and business partners than if he is driving a german luxury car.
And this kind of behaviors and influences can be found at every level and for every role and social status.
Again, many brands have understood it by creating an image associated with their products reflecting an important social role or status.
III. Personal factors:
Decisions and buying behavior are obviously also influenced by the characteristics of each consumer.
Age and way of life:
A consumer does not buy the same products or services at 20 or 70 years. His lifestyle, values, environment, activities, hobbies and consumer habits evolve throughout his life.
For example, during his life, a consumer could change his diet from unhealthy products (fast food, ready meals, etc..) to a healthier diet, during mid-life with family before needing to follow a little later a low cholesterol diet to avoid health problems.
The factors influencing the buying decision process may also change. For example, the “social value” of a brand generally play a more important role in the decision for a consumer at 25 than at 65 years.
The family life cycle of the individual will also have an influence on his values, lifestyles and buying behavior depending whether he’s single, in a relationship, in a relationship with kids, etc.. As well as the region of the country and the kind of city where he lives (large city, small town, countryside, etc..).
For a brand or a retailer, it may be interesting to identify, understand, measure and analyze what are the criteria and personal factors that influence the shopping behavior of their customers in order to adapt.
For example, it is more than possible that consumers living in New York do not have the same behavior and purchasing habits than the ones in Nebraska. For a retailer, have a deep understanding and adapt to these differences will be a real asset to increase sales.
Purchasing power and revenue:
The purchasing power of an individual will have, of course, a decisive influence on his behavior and purchasing decisions based on his income and his capital.
This obviously affects what he can afford, his perspective on money and the level of importance of price in his purchasing decisions. But it also plays a role in the kind of retailers where he goes or the kind of brands he buys.
As for social status, some consumers may also look for the “social value” of products they buy in order to show “external indications” of their incomes and their level of purchasing power..
The lifestyle of an individual includes all of its activities, interests, values and opinions.
The lifestyle of a consumer will influence on his behavior and purchasing decisions. For example, a consumer with a healthy and balanced lifestyle will prefer to eat organic products and go to specific grocery stores, will do some jogging regularly (and therefore will buy shoes, clothes and specific products), etc..
Personality and self-concept:
Personality is the set of traits and specific characteristics of each individual. It is the product of the interaction of psychological and physiological characteristics of the individual and results in constant behaviors.
It materializes into some traits such as confidence, sociability, autonomy, charisma, ambition, openness to others, shyness, curiosity, adaptability, etc..
While the self-concept is the image that the individual has – or would like to have – of him and he conveys to his entourage. These two concepts greatly influence the individual in his choices and his way of being in everyday life. And therefore also his shopping behavior and purchasing habits as consumer.
In order to attract more customers, many brands are trying to develop an image and a personality that conveys the traits and values - real or desired – of consumers they are targeting.
For example, since its launch, Apple cultivates an image of innovation, creativity, boldness and singularity which is able to attract consumers who identify to these values and who feel valued – in their self-concept – by buying a product from Apple.
Because consumers do not just buy products based on their needs or for their intrinsic features but they are also looking for products that are consistent and reinforce the image they have of themselves or they would like to have.
The more a product or brand can convey a positive and favorable self-image to the consumer, the more it will be appreciated and regularly purchased.
IV. Psychological factors
Among the factors factors influencing consumer behavior, psychological factors can be divided into 4 categories: motivation, perception, learning as well as beliefs and attitudes.
Motivation is what will drive consumers to develop a purchasing behavior. It is the expression of a need is which became pressing enough to lead the consumer to want to satisfy it. It is usually working at a subconscious level and is often difficult to measure.
Motivation is directly related to the need and is expressed in the same type of classification as defined in the stages of the consumer buying decision process.
To increase sales and encourage consumers to purchase, brands should try to create, make conscious or reinforce a need in the consumer’s mind so that he develops a purchase motivation. He will be much more interested in considering and buy their products.
They must also, according to research, the type of product they sell and the consumers they target, pick out the motivation and the need to which their product respond in order to make them appear as the solution to the consumers’ need.
Perception is the process through which an individual selects, organizes and interprets the information he receives in order to do something that makes sense. The perception of a situation at a given time may decide if and how the person will act.
Depending to his experiences, beliefs and personal characteristics, an individual will have a different perception from another.
Each person faces every day tens of thousands of sensory stimuli (visual, auditory, kinesthetic, olfactory and gustatory). It would be impossible for the brain to process all consciously. That is why it focuses only on some of them.
The perception mechanism of an individual is organized around three processes:
- Selective Attention: The individual focuses only on a few details or stimulus to which he is subjected. The type of information or stimuli to which an individual is more sensitive depends on the person.
For brands and advertisers successfully capture and retain the attention of consumers is increasingly difficult. For example, many users no longer pay any attention, unconsciously, to banner ads on the Internet. This kind of process is called Banner Blindness.
The attention level also varies depending on the activity of the individual and the number of other stimuli in the environment. For example, an individual who is bored during a subway trip will be much more attentive to a new ad displayed in the tube. It is a new stimuli that breaks the trip routine for him.
Consumers will also be much more attentive to stimuli related to a need. For example, a consumer who wishes to buy a new car will pay more attention to car manufacturers’ ads. While neglecting those for computers.
Lastly, people are more likely to be attentive to stimuli that are new or out of the ordinary. For example, an innovative advertising or a marketing message (Unique Value Proposition) widely different from its competitors is more likely to be remembered by consumers.
- Selective Distortion: In many situations, two people are not going to interpret an information or a stimulus in the same way. Each individual will have a different perception based on his experience, state of mind, beliefs and attitudes. Selective distortion leads people to interpret situations in order to make them consistent with their beliefs and values.
For brands, it means that the message they communicate will never be perceived exactly in the same way by consumers. And that everyone may have a different perception of it. That’s why it’s important to regularly ask consumers in order to know their actual brand perception.
Selective distortion often benefits to strong and popular brands. Studies have shown that the perception and brand image plays a key role in the way consumers perceived and judged the product.
Several experiments have shown that even if we give them the same product, consumers find that the product is or tastes better when they’ve been told that it’s from a brand they like than when they’ve been told it’s a generic brand. While it is exactly the same product!
Similarly, consumers will tend to appreciate even less a product if it comes from a brand for which they have a negative perception.
- Selective Retention: People do not retain all the information and stimuli they have been exposed to. Selective retention means what the individual will store and retain from a given situation or a particular stimulus. As for selective distortion, individuals tend to memorize information that will fit with their existing beliefs and perceptions.
For example, consumers will remember especially the benefits of a brand or product they like and will “forget” the drawbacks or competing products’ advantages.
Selective retention is also what explains why brands and advertisers use so much repetition in their advertising campaigns and why they are so broadcasted. So that the selective retention can help the brand to become a “top of mind” brand in the consumer’s mind.
Learning is through action. When we act, we learn. It implies a change in the behavior resulting from the experience. The learning changes the behavior of an individual as he acquires information and experience.
For example, if you are sick after drinking milk, you had a negative experience, you associate the milk with this state of discomfort and you “learn” that you should not drink milk. Therefore, you don’t buy milk anymore.
Rather, if you had a good experience with the product, you will have much more desire to buy it again next time.
The learning theories can be used in marketing by brands. As the theory of operant conditioning which states that you can build a good image and high demand for a product by associating it with a positive reinforcement (or rather a bad image with a negative reinforcement).
Beliefs and attitudes:
A belief is a conviction that an individual has on something. Through the experience he acquires, his learning and his external influences (family, friends, etc..), he will develop beliefs that will influence his buying behavior.
While an attitude can be defined as a feeling, an assessment of an object or idea and the predisposition to act in a certain way toward that object. Attitudes allow the individual to develop a coherent behavior against a class of similar objects or ideas.
Beliefs as well as attitudes are generally well-anchored in the individual’s mind and are difficult to change. For many people, their beliefs and attitudes are part of their personality and of who they are.
However, it is important to understand, identify and analyze the positive attitudes and beliefs but also the negative ones that consumers can have on a brand or product. To change the brand’s marketing message or adjust its positioning in order to get consumers to change their brand perception.
Many factors influencing consumer behavior
As we have just seen, many factors, specificities and characteristics influence the individual in what he is and the consumer in his decision making process, shopping habits, purchasing behavior, the brands he buys or the retailers he goes.
A purchase decision is the result of each and every one of these factors. An individual and a consumer is led by his culture, his subculture, his social class, his membership groups, his family, his personality, his psychological factors, etc.. And is influenced by cultural trends as well as his social and societal environment.
By identifying and understanding the factors that influence their customers, brands have the opportunity to develop a strategy, a marketing message (Unique Value Proposition) and advertising campaigns more efficient and more in line with the needs and ways of thinking of their target consumers. A real asset to better meet the needs of its customers and increase sales.